Determinants of Bank Profitability in a Developing Economy: Empirical Evidence from Bangladesh (Report‪)‬

1. Introduction The main role of a financial system is to assist the flow of funds from savers to borrowers. If a financial system is efficient, then it should show profitability improvements, increasing volume of funds flowing from savers to borrowers, and better quality services for consumers. Unlike in other developed nations where financial markets as well as the banking system work in unison to channel those funds, in developing countries financial markets are undersized and sometimes completely absent. It falls on the banks to bridge the gap between savers and borrowers and to perform all tasks associated with the profitable and secure channeling of funds. The banking sector also plays an important economic role in providing financial intermediation and economic acceleration by converting deposits into productive investments. This entails the study of banking sector performance in developing economies of greater significance.